Expediting Synergistic Paradigms

April 15, 2009: Linux Magazine, HPC writer Douglas Eadline, a market leading HPC hipster writer dude, reports on the SGI situation. SGI, formerly known as Silicon Graphics, is going down the tubes due to an industry leading April 1, 2009 bankruptcy filing (no joke). Tracing the bottom-up market trend, he recalls several distinctive user driven top-down press releases that shaped the industry.

June 10, 2005: Linux Networx Announces New CEO, ECLIPSE Certification

The Linux Networx board of directors announced the appointment of Robert H. “Bo” Ewald as chief executive officer (CEO).

“Linux Networx is recognized by the HPC industry as the leader in delivering the highest performance Linux cluster computing solutions and customer service worldwide,” said Ewald. “I’m looking forward to expanding into new international and domestic markets with supported configurations that meet our customers’ requirements.”

Ewald, 57, has an extensive history serving in executive-level positions in the HPC industry. Ewald was at Cray Research, Inc. from 1984 to 1996 where he served in several positions. Ewald also served as executive vice president and COO for Silicon Graphics (SGI) when the company had revenues of about $3.5 billion.

“Bo is a proven winner who we know well at Oak, and an ideal leader to help the Linux Networx team fully achieve the company’s extraordinary potential,” said Ed Glassmeyer, founding general partner of Oak Investment Partners and member of Linux Networx’s board of directors. Oak Investment Partners and Tudor Ventures recently invested $40 million in Linux Networx.

November 14 2005: Linux Networx, The Linux Supercomputing Company, announced today record company growth and an expanded corporate focus on delivering a systems experience to Linux supercomputing users.
“Linux Networx’s growth validates our Linux supercomputing leadership and also points to the expanding adoption of Linux by supercomputing users,” said Robert (Bo) H. Ewald, CEO of Linux Networx. “We expect our new LS Series to power even more users to leverage the advantage offered by Linux within our high-value, easy-to-own and operate Linux Supersystems.”

SGI (NASDAQ: SGIC) announced today that Robert H. “Bo” Ewald has been named Chief Executive Officer, effective immediately. In addition to his role as CEO, Bo will serve on SGI’s Board of Directors.

“I’m very pleased to be returning to SGI,” said Bo Ewald. “This is a great company steeped with accomplishment and history, highly innovative products, extremely highly skilled and dedicated employees, and a solid and loyal customer base. The SGI team has done a tremendous job over the past year, restructuring the company and refocusing its approach to the business. I’m excited about the opportunity to lead SGI and build on the momentum to grow the business by helping our customers be successful.”

SGI (NASDAQ: SGIC) demonstrated continued momentum in the HPC market today with the announcement of its acquisition of the core assets of Linux Networx, Inc. and an investment in SGI by Oak Investment Partners and Lehman Brothers. In exchange for the issuance of SGI common stock, SGI has acquired key Linux Networx software, patents, technology and expertise. Linux Networx is a recognized technology leader in the clustered HPC space and boasts a significant customer base. The acquisition is expected to advance SGI leadership in production-ready high performance computing solutions.

“This is another significant step in the growth of SGI,” said Bo Ewald, SGI Chief Executive Officer. “We’ve grown orders more than 30 percent in each of the last two quarters. We’re in a position to acquire key technology and expertise to further power our growth. This represents the first of such key technology acquisitions and will help further the development of our software environment and support for our clustered systems. In addition, we are very pleased that Oak and Lehman Brothers have provided additional financing to the company to help speed our growth.”

Rackable Systems, Inc. (NASDAQ:RACK), a leading provider of servers and storage products for medium to large-scale data centers, today announced its agreement to acquire substantially all the assets of Silicon Graphics, Inc. (SGI) (NASDAQ: SGIC) for approximately $25 million in cash, subject to adjustment in certain circumstances, plus the assumption of certain liabilities associated with the acquired assets.

“We have been working very hard to strengthen our company, and today, we’ve taken another big step in that direction,” stated Robert “Bo” Ewald, CEO of Silicon Graphics. “This transaction represents a compelling opportunity for Silicon Graphics’ customers, partners and employees, who can all benefit from the emerging stronger company with better technologies, products and markets reach.”

Rackable has signed an Asset Purchase Agreement to acquire substantially all the assets of SGI, and to assume certain liabilities relating to the assets, pursuant to Chapter 11 of the U.S. Bankruptcy Code, under which SGI filed its petition in New York on April 1, 2009. Completion of the transaction is subject to a number of closing conditions, including the approval of the Bankruptcy Court, and other uncertainties. Subject to such conditions and uncertainties, the transaction is expected to close within approximately 60 days. It is expected that SGI’s business operations will continue during the pre-closing period. SGI’s international operations would be part of the sale, but would not be part of the bankruptcy process.

John West and John Leidel of InsideHPC had this and this. Everyone else, it was reported, just shook their heads.

Comments on "Expediting Synergistic Paradigms"

matt.reilly

The interesting thing about management is the infinite variety of mistakes that can be made. Those of us on
the outside have the advantage of hindsight and ignorance of the more complicated aspects of SGI’s extremely complicated situation.

So we’ll never really know just what went wrong.

On the other hand, I’ll never understand SGI’s inability to recognize that

There was only one real out for SGI: build something that was differentiated from the pack and that people would pay real money for. That was the shared memory x86 widget. They stalled, screwed around, and took far to long to deliver it. SGI engineering was more than up to the task — what was management’s contribution?

They finally “announced” the system this year, but will it make it to market?

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